Utility Eletrobras SA closed down 2%, while Mineracao e Metalicos SA and Telenorte Leste Part lost more than 3% and TIM Participacoes, Duratex and Vivo Participacoes shed more than 2%.

Brazilian stocks were initially buoyed by a positive economic outlook after the Brazilian central bank survey indicated that economists are expecting relatively tamer inflation. The average estimate for 2010 IPCA rate was lowered to 5.45% from 5.55% and the average estimate for 2011 inflation was maintained at 4.8%, The Wall Street Journal reported Monday in its online edition.

However, a reversal in crude-oil futures erased the early-morning gains. Crude for August delivery lost $1.04, or 1.4%, to $75.05 a barrel on the New York Mercantile Exchange. Prices hit an intraday high of $76.43 a barrel earlier. See crude-oil futures report

Metals prices were weaker as well with gold for August delivery down $10.90, or 0.9%, to $1,198.60 an ounce and copper for September delivery off 5 cents, or 1.8%, to $3 a pound. Read Metals Stocks.

Mexican shares also slumped with mining and financial stocks headlining the declines.

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